Bithumb, the South Korean crypto exchange is in deep distress with multiple recent investigations and allegations around it.
On January 10, the National Tax Service (NTS) officials raided the exchange’s headquarters in Gangnam-gu, Seoul, the capital city, to investigate if the firm complied with tax regulations on cryptocurrency activity.
Now on Thursday, the South Korean prosecutors again raided the Bithumb offices to investigate the allegations of price manipulation and fraudulent transactions in local tokens. Sources suggest that the local tokens assumed to be involved in the incident are GoMoney2 and Pixel Coin.
Bithumb executives have also been charged with allegations of embezzlement and stock price manipulation. On Wednesday, local media reported that the prosecutors are seeking the arrest of Kang Jong-Hyun, the chairman and owner of the exchange.
Not just that, two more executives – including Kang Ji-Yeon, the CEO of two publicly traded Bithumb affiliates were charged by the Seoul Southern District Prosecutor’s Office with embezzlement, breach of trust, and fraudulent, illegal transactions. The investigation into the executives’ behavior has been recorded separately from the tax evasion investigation. It focuses on allegations that the accused stole company money and conspired to manipulate stock prices.
The Seoul Southern District Prosecutors’ Office briefed local media that the search of Bithumb is to gather transaction data regarding the GoMoney2 and PIxel Coin. South Korean crypto investors nicknamed locally issued cryptocurrencies “Kimchi coins” after the country’s representative fermented vegetable dish.
Sources reveal that GoMoney2 is still being traded on the platform, whereas Pixel Coin was never listed on the platform. Reportedly, the prosecutors are planning to conduct a search and seizure on the local exchanges, which delisted Pixel Coin for failing to meet internal standards.
Bithumb is the second-largest cryptocurrency exchange in South Korea by trading volume. It was also one of the country’s five fully licensed platforms following a crackdown on the industry in 2021, when approximately 70 domestic exchanges closed after failing to meet regulatory requirements.